A deal permitting the San Diego County Water Authority to move forward with the purchase of 200,000 acre-feet of water per year from the Imperial Valley appears likely to move forward. On August 31, the last day of the session, the legislature appropriated $235 million in state funds to help the Metropolitan Water District of Southern California obtain additional water for itself- a necessary pre-condition that MWD had demanded for the San Diego deal to go through. The $235 million would be used mostly to line canals in the Imperial and Coachella valleys. The canal linings would conserve 97,000 acre-feet of water, which would then be transferred to the MWD. The appropriation was included in a hastily put-together bill that also included some $210 million to buy the Headwaters Forest in Humboldt County, after a $1.7 billion water bond issue failed on Friday, August 28. It was supported by most Southern California legislators, though opposed by some environmentalists and some fiscal conservatives. Under the terms of the deal, which is being called a water exchange agreement, the Imperial Irrigation District will sell 200,000 acre-feet per year to the Metropolitan Water District, which will then sell it to the San Diego County Water Authority. The Imperial Irrigation District receives 3 million acre-feet (almost a trillion gallons) of water from the Colorado River each year. The 200,000 acre-feet should be enough for San Diego County's growth for next 30 years. The transfer is significant because it will be the largest farm-to-city water transfer in state history, and the largest water conservation project as well, according to the Metropolitan Water District, the giant water agency which supplies much of the water to urban users in Southern California. San Diego got the ball rolling in April when it signed a 45-year deal with the Imperial Irrigation District that sets up a voluntary conservation effort among local farmers to conserve 200,000 acre-feet a year. One way the water will be conserved is by installation of pumpback systems that can capture runoff from fields. Currently, much of that water goes to the Salton Sea. The Water Authority is expected to buy water at a discounted rate for the first ten years of the agreement, and to pay market rates after that. Farmers will be compensated at a rate of $250 per acre-foot of water that is saved. That program needs to win several regulatory approvals before it begins, according to Paul Cunningham, a manager at the Imperial Irrigation District. The district is hoping to begin an initial transfer of 20,000 acre-feet sometime in 1999. MWD has resisted the San Diego deal in the past, largely by demanding that San Diego pay more than $200 per acre-foot to transport the water through the Colorado Aqueduct. Yet the additional water for MWD itself appeared to mute the agency's opposition. The MWD board approved the deal in August with only one vote against - Bonnie Harman of Los Angeles. Her sentiments were echoed by an analyst for the Environmental Defense Fund, Spreck Rosekrans, who told the Los Angeles Times that his group believes the canal lining should be paid for by MWD customers, not by the state. Under a previous water-trading agreement between MWD and Imperial - which was first proposed by EDF - the MWD itself provided the cost. The water bond was intended to help placate various constituencies, but it also touched on numerous controversial issues. For example, the bond was expected to contain language on water transfers through the Sacramento-San Joaquin River delta, always a charged issue in state politics. Northern California voters voted down a proposed peripheral canal in 1982. The canal would have transferred water from the delta for use in Southern California. A draft EIR for delta restoration issued this spring by the CALFED program includes a peripheral canal, or "open channel isolated facility," as one of the options for restoring the delta. Environmentalists have charged that is the preferred option, although the Wilson administration has denied that it is (See CP&DR, April 1998). The new bond measure would have prohibited creation of a peripheral canal. The bond deal failed late in the session, apparently because Republicans and Democrats disagreed over whether to move forward with studies for additional reservoirs in the Central Valley. The MWD touted the San Diego water exchange agreement as a boon for the delta, and contended that the agreement could reduce its reliance on water supplies in Northern California. If the MWD-San Diego deal holds, it will provide San Diego with more control over its water supply. San Diego County gets about 80% of its water from the MWD, and for years locals have worried that the L.A.-based MWD would not share the water in the event of a crisis. San Diego County, which has grown to a population of 2.5 million people, has no alternative source of water. The MWD provides 60% of the water to urban Southern California, and for 70 years has been a powerful player in state water politics. San Diego County's water authority is one of 27 member cities and water agencies in the MWD. The deal follows years of maneuvering by San Diego to secure more water and to assert itself on the MWD board. Several years ago, San Diego demanded 400,000 acre-feet of water, higher quality water, and greater representation on the MWD board. At one point, the San Diego water maneuvers included Texans Sid and Lee Bass, who have been involved in a variety of speculative ventures and corporate takeover attempts. The Bass Brothers' Western Farms company bought over 10% of Imperial Valley farmland between 1995 and 1997. They immediately began seeking urban buyers for the water. But Western Farms swapped its land in the valley for stock in a company called U.S. Filters, and the Basses are now out of the picture. Of the $235 million in state bond money slated to pay for the water accord, $200 million would be used to concrete-line the All American canal and its Coachella branch. That would save 97,000 acre-feet of water, for use by the MWD. Another $35 million would be used for groundwater storage projects along the Colorado River. The federal government and six other Colorado River basin states are insisting the California reduce its reliance on Colorado River water. The Golden State has an entitlement of 4.4 million acre-feet a year, but has been using about 5.2 million acre-feet. U.S. Secretary of the Interior Bruce Babbitt has warned California that it needs to reduce its draw of river water. Contacts: Bob Gomperz, spokesman, Metropolitan Water District, (213) 217-6000. Paul Cunningham, Manager for External Affairs, Imperial Irrigation District (760) 339-9416. Alan Ames, media relations representative, San Diego County Water Authority, (619) 682-4181.